NEW YORK, SEPT. 24 -- Stock prices closed lower today as profit taking and concerns over a weaker dollar and lower bond prices brought the market's two-day runup to an abrupt halt.
The Dow Jones average of 30 industrials, up 92.85 points Tuesday and Wednesday, dropped back 19.25 to 2566.42. Volume on the New York Stock Exchange slowed to 162.15 million shares from 220.28 million in the previous session.
Activity was curtailed by the observance of Rosh Hashana, the Jewish New Year.
One apparent drag on the market was a rise in open-market interest rates. Prices of long-term government bonds, which move in the opposite direction from interest rates, fell about $10 for each $1,000 in face value.
Some traders also were skeptical that the market's upsurge this week signaled the end of the "correction" that set in late last month.
Ricky Harrington, a technical analyst with Interstate Securities Corp., Charlotte, N.C., said investors should not be fooled by the nearly 93-point advance in the Dow average on Tuesday and Wednesday.
"This market, despite the reversal, is very sensitive to interests rates, and I don't think the reversal on the upside precludes further weakness in the month of October."
Harrington said he expects the market to test 2500 or below early next week.
Analysts also said investors were looking ahead cautiously to a meeting this weekend in Washington of the so-called Group of Seven industrialized countries, and its possible implications for the dollar.
"There are more and stronger crosscurrents than there were certainly six months ago," said John Connolly at Dean Witter Reynolds Inc. "We are now far removed from the time when all financial assets were going up."
Losers among the blue chips included Merck, down 4 3/4 at 200; General Electric, off 1 at 61; Coca-Cola, down 1 1/4 at 48 1/8; RJR Nabisco, off 1 1/2 at 65 1/2; McDonald's, down 1 7/8 at 54, and American Express, down 1 at 35 7/8.
But International Business Machines' stock gained 1 5/8 to 155 7/8, among several computer and technology issues that bucked the downtrend. Digital Equipment added 1/2 to 189 7/8, Computer Sciences 2 5/8 to 67 1/2 and Compaq Computer 4 3/4 to 65 7/8. A Wall Street Journal article discussed Compaq's planned introduction of speedier portable and desktop computers.
Several producers of machinery and industrial goods also moved up, continuing a recent advance that has been prompted by signs of a strengthening in the manufacturing sector of the economy.
Deere & Co. rose 1 1/4 to 40 1/8, Caterpillar 2 to 73 3/8, Norton Co. 2 to 57 3/4 and Clark Equipment 7/8 to 33 1/2.
Holly Farms fell 5 1/8 to 35 1/2. The company predicted a substantial quarterly earnings decline.
Declining issues outnumbered advances by about 8 to 7 on the NYSE.
The NYSE's composite index of all its listed common stocks lost 0.67 to 178.86.
Nationwide turnover in NYSE-listed issues, including trading in those stocks on regional exchanges and in the over-the-counter market, totaled 184.40 million shares.
Standard & Poor's index of 400 industrials fell 1.51 to 373.78, and S&P's 500-stock composite index was down 1.47 at 319.72.
The Nasdaq composite index for the over-the-counter market rose 0.54 to 441.24. At the American Stock Exchange, the market value index closed at 353.88, up 0.57